Tracy L. Geaccone - Page 11




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        liability for the unpaid tax resulting from respondent’s                      
        reallocation of her withholding credits.3                                     
            As directed by section 66(c), the Commissioner has prescribed             
       guidelines in Rev. Proc. 2003-61, 2003-2 C.B. 296, modifying Rev.              
       Proc. 2000-15, 2000-1 C.B. 447, that are to be used in determining             
       whether it is inequitable to hold a requesting spouse liable for               
       all or part of the liability for any unpaid tax or deficiency.4                
       Sec. 1.66-4(b), Income Tax Regs.  The requesting spouse must                   
       satisfy five conditions (threshold conditions) before the                      
       Commissioner will consider a request for relief under section                  
       66(c).  Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297.                     
       Respondent concedes that petitioner satisfied the threshold                    
       requirements.                                                                  





               3Reallocation of the withholding credits affects the final             
          balance due from petitioner more than the treatment of the                  
          community income.  Petitioner claimed a credit of $38,354 for               
          withheld taxes, as shown on her Form W-2, Wage and Tax Statement.           
          Respondent proposes to allow only $25,569.33 of this amount, a              
          difference of $12,784.67.  In contrast, the deficiency in tax               
          which resulted from the allocation of a portion of Dr. Geaccone’s           
          income to petitioner was $5,921.                                            
               4Rev. Proc. 2000-15, 2000-1 C.B. 447, was superseded by Rev.           
          Proc. 2003-61, 2003-2 C.B. 296, which is effective as to requests           
          for relief filed on or after Nov. 1, 2003, and for requests for             
          relief pending on Nov. 1, 2003, as to which no preliminary                  
          determination letter had been issued as of that date.                       
          Petitioner’s application for relief was filed after Nov. 1, 2003,           
          in August of 2004.  Respondent issued a notice of deficiency on             
          Jan. 20, 2006.                                                              





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